Wema Bank mulls shift of capital raise to 2018

Wema Bank Plc has said it is considering to shift its plan to raise additional debt capital to further give the lender necessary leverage to drive growth till first quarter of 2018.
The Chief Finance & Strategy Officer of Wema Bank Plc, Mr. Tunde Mabawonku, stated this at 2017 media parley aimed to discuss the Bank’s half-year 2017 reports.
He said the bond issue was part of the banks existing 7-year strategic programme.
The bank had last year raised N6.25 billion following an approval the lender obtained from shareholders at the last year annual general meeting (AGM) to issue bonds or preference shares in the first tranche of a N50 billion programme
Mabawonku said: “We have a N50 billion bond programme approved by SEC, last year, we raised N6.25 billion so we still have availability for about N43bn to raise in the market. The plan is that we would have started the bond raise this month August but like we mention, interest rate is still high, outlook for rate for what we see in inflation might still be very high.
“What we did first was to check what our capital adequacy ratio is. Today it is 12.7 per cent. Do we foresee any major decline, no, the economy is improving foreign exchange is available, customers are paying down, there is a better liquidity in the market, so we don’t see any major deteriorations in NPL
If capital adequacy is around 12 per cent, the minimum threshold is 10 so we will still be comfortable. If rates do not reduce then probably we may not raise the bond this year. We will wait till April or May next year. If we don’t raise the bond, capital adequacy numbers will still remain above 12 per cent mark,” he said.
The Banks Executive Director, Folake Sanu also filing questions to journalists, said the drop in the banks deposit was due to strategic restructuring.
She said :”It is just that we tried to change the structure of our deposit. With the high cost of fund, we were trying to concentrate on the retail market and grow our current accounts and savings accounts instead of actually bloating up the deposit with huge term deposit.
So that accounted to slight reduction of deposit, there was also flight to safety at some time when Skye Bank was taken over by CBN.